Mexico’s two-step solution to removing the stigma of its Brady bond was a stunning success.
The first step involved arranging a $2bn one-year bilateral credit for Mexico, aimed at partly financing a $3.8bn call of outstanding par bonds.
The next step was the announcement, the following day, of a two-tranche $2bn global bond issue, subsequently upsized by $500m on the back of strong demand.
This was Mexico’s biggest ever single-day fundraising exercise of straight debt in the international capital market. The coupons were the lowest in Mexico’s recent funding history, averaging 5.9% for 15.3 years.
In total, the two-tranche dollar deal generated orders of $4.6bn from more than 74 investors, with well diversified distribution, fully meeting Mexico’s objective of broadening its investor base.
